Introduction

On June 14th, a Foxconn worker jumped to his death from his apartment building in Chengdu, marking the 18th reported worker suicide at Foxconn factories in China in just over two years[1]. Many additional suicides may have gone unreported[2][3]. But these deaths and the focus on conditions at Foxconn reflect only a portion of the troubling conditions at Apple suppliers.

This investigation of other Apple suppliers in China reveals that serious work-related injuries and worker suicides are by no means isolated to just Foxconn but exist throughout Apple’s supply chain. For example, we found that at least two workers committed suicide at Flextronics’ factories[4] last year[5][6] (Ganzhou and Zhuhai) and that upwards of 59 workers were injured in explosions at Riteng’s Shanghai factory last December[7] (both are Apple’s suppliers). More broadly, this investigation of ten different Apple factories in China finds that harmful, damaging work environments characterized by illegally long hours for low levels of pay are widespread in Apple’s supply, with working conditions frequently worse at suppliers other than Foxconn. We also document for the first time the tremendous problems caused by the use of ‘labor dispatching’ by Apple suppliers in China.

Apple must take on the responsibility of improving conditions in its supply chain and changing its purchasing system. We hope that Apple will respond to these investigative findings, which go well beyond that of the Fair Labor Association (in a study paid for by Apple). Unfortunately, Apple has never responded to any of China Labor Watch’s investigative findings. Apple has promised this year to improve working conditions in its Chinese supplier factories, but based on its track record of not meeting such promises in the past, we are compelled to ask: are these promises sincere or merely a public relations ploy?

Background Information

In 2006, the Western media began investigating labor conditions in Apple’s supply chain in China. Subsequent reports on Foxconn factories in 2007 prompted Apple to start auditing its supplier factories and also to begin publishing its annual Supplier Responsibility Progress Reports. In addition to Apple, other electronics companies felt compelled to respond after the media exposed poor working conditions in Foxconn factories. Under pressure from Apple and other companies, Foxconn radically reformed its dormitories—instead of sleeping 300 in a room, workers now sleep eight to twelve in a room. The improvement in dormitories was apparent to all observers, but other important aspects of working life, like the intensity of labor, remained unimproved, or even worsened. In 2006, an assembly line with 150 workers assembled a little more than 2000 computers in a day. By 2011, this number had increased to 3,500 computers. Part of this increase is the result of improved automation on the assembly line, but another significant factor is the dramatically increased intensity of the work itself.

After a string of worker suicides at a Foxconn Apple factory in May 2010, dozens of media reports put increased pressure on Apple and Foxconn to make changes. Foxconn vowed to raise wages and, perhaps more importantly, to set stricter limits on workers’ overtime hours. Before 2010, workers often had to work over 300 hours per month, logging around 120 hours of overtime. According to our investigations over the last two years, Foxconn has effectively reduced overtime to less than 80 hours a month in most departments and workshops. While this represents improvement, this amount of overtime is still nearly double that of the overtime permissible by Chinese law and often pushes workers well beyond reasonable limits.

Without media coverage of poor working conditions, these changes would have taken years to occur, if ever at all. As evidence, note that overtime hours at Apple suppliers other than Foxconn tend to be much longer.

New York Times stories in early 2012 put Apple and Foxconn back in the spotlight. In a matter of days, social activism sites Change.org and SumOfUs.org collected over 200,000 signatures for petitions to improve working conditions at Foxconn, and, caving to external pressure, Apple invited the Fair Labor Association (FLA) to conduct independent, third-party audits of the factory conditions at Foxconn. After FLA finished their audit, Apple and Foxconn said that changes would be made. However, if you read Apple’s own reports on conditions at its supplier factories, and reports on Foxconn factories by SACOM and China Labor Watch, and other related media reports, you will find that FLA’s report presents no new findings; all the problems that the FLA raised have been raised in previous reports. Since Apple failed to ensure that many needed reforms would be made before, its new commitment should be treated with skepticism.

About Our Report

From January through April 2012, China Labor Watch conducted investigations at ten Apple supplier factories. Initially, we hoped to use worker surveys to measure various working conditions quantitatively. However, after successfully surveying four factories in Shenzhen, our investigators ran into opposition in Shanghai and Jiangsu province. In Shanghai, factory management found out about our surveys and contacted the local police, who then confiscated our surveys and detained our investigators for seven hours before buying them train tickets and ordering them to leave Shanghai. In Jiangsu province, police also bought our investigators train tickets and forced them to leave. Undeterred in the face of obstacles, we sent a second investigatory team to finish what had been started. Some of our investigators entered the factories as undercover workers while others interviewed workers around the factory premises. Altogether, six investigators were involved, including two college graduates, one vocational school graduate, and three workers who left their factories to become labor activists. In addition, four of the six investigators have two or more years of experience in the labor rights field in China, and all of them are familiar with factory conditions and can easily engage workers.

The findings of this report are primarily based on survey data and firsthand observations. At the end of the report are case-by-case descriptions of each factory’s working conditions. The ten factories in our report were picked directly from Apple’s list of supplier factories. By investigating ten factories of varied scale and location, we hoped to investigate whether the problems identified by the New York Times and other reports are isolated to Foxconn or exist throughout Apple’s supply chain. In fact, many of the factories that we investigated performed much worse than Foxconn in key areas of workers’ rights such as overtime hours, pay, and labor dispatching. On the various factories’ websites, they claim to produce for other brands besides Apple, but we did not investigate to confirm these claims. From our experience, a factory’s clientele changes frequently, so they could still be producing for these brands or have only produced for them in the past.

Investigative Findings

From our investigations we found that the labor rights violations at Foxconn also exist in virtually all other Apple supplier factories, and in many cases are actually significantly more dire than at Foxconn. For instance, working conditions at the Riteng Computer Accessories factory are especially difficult, and worse in key respects than the still harsh conditions at Foxconn.

We found that the following problems are common in many of the ten factories:

1. Excessive Overtime: The average overtime in most of the factories was between 100 and 130 hours per month, and between 150 and 180 hours per month during peak production season. This is disturbing when compared with China’s legal limit of 36 hours of overtime per month.

2. Workers are exposed to a variety of dangerous working conditions. For example, some workers at Tenglong reported that their work area was poorly ventilated and that the air was dense with metal dust. Workers in all the other factories also reported safety concerns and hazardous working environments.

3. Factories unfairly calculate workers’ work time. For example, workers at Jabil must attend a 15-minute meeting every morning before their shift, but they are not paid for this time. Most factories also restrict workers’ bathroom breaks.

4. A majority of workers were unsatisfied with the food offered in the factory cafeterias and hoped that dormitories and meals would be improved.

5. Most workers are not familiar with unions and their function. They have little ability to push for reasonable working conditions.

6. Low wages compel workers to accept overtime hours well in excess of the legal maximum. Most of the factories we investigated only pay a basic salary equal to the minimum wage stipulated by the local law, which are around USD $200/month in most areas. Because the basic salary is not enough for the workers to live on in the city, they have to work long hours to support themselves.

7. Work intensity is very high. In nine factories, workers generally work 11 hours every day, including weekends and holidays in peak seasons. They can only take a day off every month, and they may need to work for several months without a day off in the peak seasons. They have to work on the assembly line standing on their feet all day, and can only have two 30-minute meal breaks every day.

8. Some factories do not pay for workers’ social insurance, work injury insurance, and other insurances as required by law.

9. Some factories do not give workers proper pay for overtime work. For example, Riteng employees who work more than 80 hours of overtime in a month receive a “bonus” instead of overtime pay. The amount of the bonus is less than the legal overtime wage, and Riteng uses this tactic to hide excessive overtime hours.

Problems Overlooked by Apple/Labor Dispatching

Our research revealed that the biggest problem overlooked by Apple in their Social Responsibility Reports is the prevalent use of dispatched labor in their supply chain. Except for Foxconn in Shenzhen which transferred all dispatched workers to direct-hire status in 2011, all other investigated factories overused dispatched labor, including Jabil in Shenzhen where dispatched labor made up almost 70% of the workforce[8].

We have written a separate section of the report to address this serious and overlooked problem. Labor dispatching demands special attention because Apple does not address it in its Supplier Responsibility Progress Reports and because it has a substantial impact on workers’ rights. If Apple were to take the problem into account, the number of supplier factories that meet Apple’s standards would fall considerably. It is important that the plight of these dispatched workers is brought to light and that their concerns are heard.

Our findings include:

1. Factories can use dispatched labor to employ people short-term without having to pay severance compensation.

2. Factories can use dispatched labor to shift responsibility for worker injuries onto another party.

3. Factories can use dispatched labor to prevent workers from organizing into unions or establishing democratic management systems.

4. Factories can reduce other forms of worker compensation, and thus their labor costs, by hiring dispatched labor. For instance, when companies contribute to social insurance programs for dispatched workers, they pay a smaller percentage or sometimes do not sign up workers at all.

5. Dispatched workers have no limitation on the amount of overtime that they work. Some have to work more than 150 hours of overtime every month.

6. The dispatching companies often charge the workers a recommendation fee between 20 and 120 USD and may also charge a monthly service fee. These fees are quite substantial when compared to the workers’ monthly salary.

Conclusions

Since Apple’s audits are conducted with a much larger budget than our investigations, we are confident that Apple is already well-aware of the problems that we address in this report. The real question remains whether or not they are willing to take the necessary actions to create changes. If Apple took significant steps that showed that they are willing to work on projects to improve factory conditions, to share costs and responsibilities with factories, and to work with other brands to create industry-wide standards, this would be more helpful than their historical approach of promising change until attention turns elsewhere, without delivering results.

Apple is responsible for the existing problems in its suppliers’ factories, instead of shirking its responsibility. What matters is the improvement in labor practices Apple has achieved, instead of what they are doing as claimed.

An Investigative Report on Labor Dispatching Practices at Apple Suppliers in China

Starting in January 2012 and ending in April, China Labor Watch conducted a series of investigations at Apple suppliers[9][10] in Shenzhen, Shanghai, and Jiangsu Province that focused on hiring practices, hours and remuneration, working environment and occupational safety, meals and housing, labor unions, and leisure life. The investigations were conducted mainly through surveys, onsite visits, private interviews, and undercover workers. This report focuses exclusively on the topic of labor dispatching and provides detailed analysis of this growing phenomenon.

What is Labor Dispatching?

Labor dispatch companies are employment intermediaries similar to temporary employment agencies in the United States. Whereas workers typically enter into a contractual relationship directly with their employer, labor dispatching introduces a third-party into the arrangement. Workers are contractually obligated to their dispatching company, and the company sends its workers to work in factories on an as-needed basis. Factories have no formal relationship with the dispatched workers and can send them back to their dispatch companies at any time.

According to Chinese labor contract law, employers must pay salaries to their employees every month and contribute to social welfare programs on their workers’ behalf. As the factory workers’ only formal employer, the dispatch company must fulfill these duties, but in many cases they do not. Even when a worker is not dispatched to a factory, the dispatch company still has a legal responsibility to pay them a monthly salary according to local minimum wage standards. Relevant contract laws also state that dispatched workers “shall typically assume only short-term, assistant, or replacement positions,” but this is rarely the case. In addition, dispatch companies and factories are not allowed to charge the workers for any fees, but almost all the dispatch companies are charging workers now. Excessive use of dispatched labor remains rampant in various industries. Although relevant labor laws require that “dispatched workers receive equal pay as their direct-hire counterparts for equivalent work,” the reality is that dispatched workers are treated like second-class workers, and their rights are regularly trampled on—their wages are lower, their benefits are worse, and the intensity of their work is much greater.

In Apple’s 2012 Supplier Responsibility Progress Report, the company draws attention to the status of foreign contracted workers, but does not describe the situation of the thousands of dispatched workers that work in its supply chain in China. To address this oversight, China Labor Watch conducted investigations at eight Apple supplier factories in China and discovered various employment situations that are in violation of Chinese labor law and Apple’s own corporate responsibility standard.

Investigative Findings

Our investigation examined factories owned by Jabil, Foxconn, and BYD in Shenzhen; Riteng and Kenseisha in Shanghai; and Jabil, Catcher, and United Win in Suzhou, Jiangsu Province. Each of the eight factories uses student workers and dispatched labor to varying degrees.

We conducted our surveys via interview at the three factories in Jiangsu Province and the Kenseisha factory in Shanghai, and via survey at the three factories in Shenzhen and the Riteng factory in Shanghai. Initially, our investigators used surveys at all the factories, but because of unanticipated police intervention, the investigators were unable to proceed with some of the surveys in Shanghai and Jiangsu. Although surveyors were arrested and expelled from Shanghai (Altogether 150 surveys were seized by the police there) and Jiangsu, investigators returned to the factories to conduct face-to-face interviews with workers. The data we obtained, which indicates the widespread use of dispatched workers by many Apple suppliers, is presented in the chart below:

Factory Name

Shenzhen

Shanghai

Jiangsu Province

Foxconn

BYD

Jabil

Riteng

Ken-seisha

United Win

Catcher

Jabil

Survey Method

Q

Q

Q

Q

I

I

I

I

Effective Sample Size

65

59

53

68

/

/

/

/

# of Dispatched Workers

5 (be officially employed later)

7

37

34

/

/

/

/

Share of Total

7.7%

11.9%

69.8%

50%

≈35%

≈65%

≈70%

≈65%

Q = Questionnaire, I = Interview

The factories in Shenzhen are relatively concentrated and have residential communities suitable for workers close by. In addition, factories often set up recruitment spots at their gates, where they post detailed information on job openings and interview times. Job seekers have easy access to job listings at different factories and can interview directly with their prospective employer when they are ready to pick a factory. At large factories in Shenzhen, like Foxconn and BYD, workers’ salaries and benefits are relatively reliable, and there are established residential communities in the surrounding area. If a job seeker hears that work is easy to find in a particular area, they can move to a nearby community and then respond to job listings at the factories’ designated times. Simply put, these two factories have little trouble finding workers to fill empty positions. Jabil in Shenzhen, on the other hand, is much smaller compared to other factories in its industrial zone and is somewhat isolated geographically. Although there is a residential community nearby, there are not nearly enough job seekers there to fill the factory’s labor shortage.

According to our study of Shenzhen, Foxconn has already signed their dispatched workers as contracted workers. The five workers who classified themselves as dispatched workers in our survey have already become direct-hire employees, and as of now there are no dispatched workers at the factory. The situation at BYD remains unclear, and dispatched workers continue to make up a large portion of the workforce at Jabil.

The layout of industrial zones in the Yangtze River Delta region (which includes Shanghai, Southeast Jiangsu Province and Northeast Zhejiang Province) differs greatly from those in Shenzhen. Factories in this region are clumped together densely and have practically no employee dorms or nearby communities. To get to and back from work, employees rely primarily on factory-owned buses that run from the factory to their living quarters several miles away. Job seekers have no choice but to also live in these communities while they look for jobs, but there are no factories nearby and factories do not actively recruit workers either.

Consequently, a situation has emerged where job seekers in the surrounding communities have trouble finding work and factories in the industrial zone have trouble finding workers. Under these circumstances, hundreds of referral agencies have developed to help the two groups connect. Worker communities in the Yangtze River Delta are surrounded by dozens of these small agencies that either belong to a larger recruitment company or operate without a license. The layout of the agencies is simple—a retail space of about 10 square meters to serve as an office, two or three workers, a computer, and a couple of tables and chairs. The agencies describe the pay and benefits of various factories to prospective workers, and after workers choose a suitable factory and pay the referral fee, the agency organizes transportation to the factory for an interview, physical exam, and other hiring procedures.

While at first blush this all seems reasonable, the contract that workers end up signing is often not with their factory but with some labor dispatch company that they know little about. Because all of the hiring procedures are done at the factory and because workers have only a rudimentary understanding of labor laws, most workers won’t object to signing this altered work contract. They will think they are direct-hire employees and not realize they have just been “sold” to the factory by someone else.

Dispatched labor makes up more than 60% of the workforce at electronics factories in the Yangtze River Delta, far more than that in the Foxconn and BYD factories in Shenzhen, which is around 30%. Our investigators suspect this difference is primarily due to the placement of factories and the layout of surrounding areas in the Yangtze River Delta.

Based on this account, it is easy to believe that local environmental factors and inappropriate city planning are the culprits that force workers to rely on intermediaries to find jobs. The referral agencies are motivated by profit and pass the workers off to labor dispatch companies, who in turn send the workers off to factories in return for their own cut. If this were the case, the situation could be remedied by standardizing governance of the labor market and intensifying supervision of labor dispatch companies. However, the situation is not that simple; many factories that have the ability to recruit and hire workers directly are choosing not to do so in favor of using dispatched labor.

Reasons for the Rise of Labor Dispatching

In addition to the above reasons, why do factories use dispatched workers? And what specific effect does this system have on workers? According to our investigators’ interviews, certain economic realities as well as the factories’ own self-interest are the key factors that have caused this system to develop.

The reality of the situation is that factories are facing significant labor shortages and have trouble recruiting workers. Because of the changes in the supply and demand of domestic labor markets, labor shortages at factories have steadily grown over the last few years. In addition, electronics manufacturing is particularly labor-intensive and is more demanding on workers. With students only able to work short-termly and non-students looking for jobs in other industries, traditional recruitment methods are simply unable to meet the production needs of these factories. Referral agencies and labor dispatch companies are therefore the best choice for these factories. With recruitment spots on every street corner, referral agencies can gather large groups of workers in no time at all, and profitable labor dispatch companies are able to team up with recruiters quickly and efficiently. This hiring system is able to provide factories with many new workers in a short time frame.

Factories also face an inconsistent stream of orders; when they have an unexpected spike in orders, they often need to increase their workforce to produce the goods on time. Labor dispatching can help meet this sudden demand.

The Effect of Labor Dispatching on Workers’ Rights

While this hiring method may alleviate a factory’s recruiting troubles, it increases the cost of a worker’s job search. First, the worker must pay the agency a referral fee for their services, ranging anywhere from ten to several hundred RMB. Then, they must pay the labor dispatch company up to 200 RMB ($32) for a physical exam, materials fee, and/or management fee. Only after paying all of these fees can the worker report to the factory for an interview and other hiring procedures. The result is that workers bear all of the additional financial burden and must spend more time securing a job. If the factory directly hired workers, they would not have to jump through so many hoops.

The factories also use dispatched labor to their own advantage, specifically by transferring risks and lowering costs. Such examples of self-interest are elaborated in the points below:

1. Factories can use dispatched labor to avoid paying severance to short-term workers. For example, if a factory lays off workers in its low season or wants to hire better workers to replace inferior ones who have already passed their trial period, the factory is usually required to pay a one-time severance fee to the discharged workers. With dispatched workers, however, the factory can send them back to the dispatch company as soon as the peak season ends. The dispatch company might reassign the worker to a new factory, but the more likely scenario is that they will do nothing at all. Most workers do not know where their dispatch company is located or even the company’s name. With little understanding of the law, most workers will just think they have lost their job and will not go through the trouble of demanding their rights.

2. By using dispatched labor, factories can also avoid responsibility for occupational hazards. Nearly all of the factories examined in this report are electronic case manufacturers, an industry that involves using industrial chemicals, metallurgy, and other activities with a high level of risk. Workers may suffer mechanical equipment injuries or be exposed to loud noise, dust, or poisonous chemicals. Of these hazards, mechanical equipment injuries have the most immediate and obvious effects so workers can apply directly for injured workers’ compensation insurance. Although the application process can be complicated, these injuries have no latent period to speak of. However, injuries like those caused by loud noise, dust, and exposure to chemicals develop over an extended period of time; complications are often not immediately apparent and only manifest themselves clinically after an unspecified length of time. By the time medical attention is necessary most workers have already left their original dispatch company or factory and have a hard time exercising their right to compensation and medical treatment.

Workers must present relevant work documents when seeking compensation for whatever type of injury they sustain. However, the relationship between the worker and their dispatch company and factory is based on the idea that “When you are working, there’s no problem, and when there’s a problem, you’re out of work.” When a worker is injured, the factory and the dispatch company both try to shift responsibility onto the party. Even if a worker is able to overcome all these obstacles and obtain the necessary paperwork, the dispatch company is unlikely to have sufficient resources to provide compensation. Meanwhile, the factory—the party which is most responsible for the situation—can walk away without the slightest accountability.

3. By hiring dispatched workers, factories can also prevent collective bargaining and any semblance of democratic management. Over the last few years as workers have become more aware of their rights and as the prices of ordinary goods have skyrocketed, more and more workers have begun to bargain collectively with their employers for higher wages, safer working conditions, and other issues of concern. At some factories, workers have even elected representatives and vetoed unreasonable factory rules. These actions have increased the operational costs of factories and broken the “low-cost, high-profit” model that factories previously enjoyed. With dispatched workers, the factory can send them back to their dispatch company as soon as they show signs of organizing and avoid collective bargaining altogether. Since most workers don’t consider themselves to have any direct connection to their dispatch company and most dispatch companies disperse their workers to many different factories, the chance of workers organizing on this level is even slimmer. Without knowing it, the workers have been quietly stripped of their right to bargain collectively.

4. Factories also reduce their labor costs in indirect ways by using dispatched workers. During our investigation we did not find that dispatched workers earned any less than their factory-hired counterparts, but a deeper analysis reveals that even if workers’ salaries do not vary significantly within the same factory, the intensity and duration of their shifts do. In many cases where salaries were equivalent, dispatched workers had jobs with higher exposure to occupational hazards and longer shifts.

Take Jabil’s factory in Shenzhen for example. According to initial analysis of our completed surveys, in a month where workers worked 250 hours (25 days x 10 hour/day, an approximation of an average work schedule), there were 26 workers who earned less than 2,500 RMB ($400) , of which 24 (92.3%) were dispatched worker. There were also 26 workers who earned more than 2,500 RMB ($400), of which 13 (50%) were workers directly hired by Jabil.

5. Because there is no limit on the amount of overtime that dispatched workers can work, in order to make ends meet, dispatched workers tend to work longer overtime hours as the hourly rate is so low, to make more money. Consequently, this result in the significantly excessive overtime hours each month of those dispatched workers.

Companies also tend to save money by hiring dispatched workers, especially on social security expenses. Dispatched workers are often registered according to the lowest standard or only registered for the most basic programs, like injury compensation and medical insurance. For direct-hire employees, the factory’s contribution to social security is 11% of their salary. So if a worker makes 2,500 RMB ($400) per month, the factory will contribute 275 RMB ($44) in social security. For a dispatched worker, however, the contribution is calculated according to an 1,800 RMB ($288) salary baseline so that the total contribution is only 198 RMB ($31). Direct-hire employees are also part of the public housing fund which requires the factory to contribute an additional 8% of salary, or 200 RMB ($32) per month. Companies do not have to contribute on behalf of dispatched workers. In this way, a company spends 277 RMB ($44) per month less on benefits for a dispatched worker than for a direct-hire employee.

I. Introduction

This report is the result of a China Labor Watch (CLW) independent investigation into ten of Apple’s supplier factories in mainland China. China Labor Watch is a New York-based international labor rights NGO that investigates labor issues in the global supply chain in order to protect workers’ rights in China and ensure that workers receive fair compensation for their contributions to economic development.

Apple Inc. is the largest company in the world by market capitalization and the undisputed leader of the technology industry. Whenever the company releases a new product, hordes of loyal customers around the world stand in line for hours, sometimes even camping overnight, to get their hands on the newest iPod or iPhone. Apple represents affluence, modernity, and refined aesthetics, and its Code of Conduct promises safe working conditions in its supply chain, dignity and respect for all workers, and the protection of labor rights throughout the manufacturing process. Over the course of the last few years, however, the company has increasingly become the focus of international labor rights groups because of workers’ rights violations in its supply chain. Is Apple living up to its promises of protecting workers’ rights throughout the manufacturing process of its top-selling products?

Starting in January 2012, China Labor Watch conducted a series of investigations[12] at ten Apple suppliers in Shenzhen, Shanghai, and Jiangsu Province that focused on hiring practices, hours and remuneration, working environment and occupational safety, meals and housing, labor unions, and leisure life. The investigations were conducted mainly through surveys, onsite visits, private interviews, and undercover workers. We had hoped to use surveys everywhere but actions at certain locations by the Chinese police forced us to rely heavily on other information-collection methods as well.

II. Factory Profiles and Methodology

The total number of workers who filled out surveys or accepted our interview is around 630. For factories we just conducted the research method of interview, the size of each sample is larger than 30 workers.

Shenzhen

We investigated three supplier factories in Shenzhen: Foxconn Technology Group in Guanlan District, BYD Electronics International Co., Ltd. in Baolong District, and Jabil Circuit, Inc. in Shajing Town. We conducted surveys and private interviews in all three, and at Jabil, our investigation was supplemented by onsite observations.

Factory Name

Approx. # of workers

Surveys distributed

Surveys returned

Effective Surveys

Foxconn

120,000

70

66

65

BYD

30,000

73

69

59

Jabil

4,000

69

64

53

Shanghai

We investigated two supplier factories in Shanghai: Riteng Computer Accessories Co., Ltd. in the Songjiang Export Processing Zone and Kenseisha Shanghai P.M.O. Co., Ltd. in the Fengxian Export Processing Zone. At Riteng we used both surveys and private interviews, while at Kenseisha we used private interviews and onsite observations, but no surveys.

III. Investigative Findings

During our investigation, we observed the current conditions of the ten factories in terms of hiring practices, hours and remuneration, working environment and occupational safety, meals and housing, labor unions, and leisure life. In the investigations of the following five sections, only examples from those factories (out of the ten) where the working conditions were substantially investigated and reported were included.

A. Hiring Practices

Exploitation of dispatched workers, overreliance on referral agencies, and open discrimination against job applicants are all common hiring practices at these factories. Of course, the end goal of these policies is to reduce costs, shift risks away from the factory, and avoid responsibility.

Through interviews with workers and employment agencies, we found that of the five factories where we did not distribute surveys, all except TOYO used dispatched workers to varying degrees. On average, we estimate that more than half of the workers in these factories are dispatched workers. The dispatched worker data for the four factories in which we were able to conduct surveys is as follows:

Factory Name

Foxconn

BYD

Jabil

Riteng

Sample size

65

59

53

68

# of dispatched workers

5 (all dispatched workers were officially employed later)

7

37

34

% of sample

7.7%

11.9%

69.8%

50%

Of the nine factories where we were able to investigate hiring practices, TOYO was the only one in which we did not find dispatched workers. (However, because of factory restrictions, we cannot confirm that there are no dispatched workers in this factory.) Foxconn recently added all dispatched workers to their permanent workforce, and BYD had relatively few dispatched workers (according to interviewed workers, BYD had some dispatched workers, but we have not verified yet). At the remaining six factories, however, dispatched workers made up more than half of the total workforce. These hiring practices are in clear violation of Article 66 of the Labor Contract Law, which states that “dispatched workers shall typically assume only short-term, assistant, or replacement positions”. In addition, factories often pay their dispatched workers less than their direct-hire employees for equivalent work, as told by the interviewed workers. For example, of the 50 workers in Jabil who reported their salary in our survey, 26 of them made less than 2,500 RMB ($400) per month and 24 of them made more. Dispatched workers made up more than 90% of the lower salary group but only half of the higher salary group.

Misuse of dispatched workers can often lead to other violations of workers’ rights. For more information on the topic, please consult China Labor Watch’s “Investigative Report on Labor Dispatching Practices at Apple Suppliers in China.”

We found that the hiring procedures for employees were frequently designed at the expense of workers’ time and financial resources. Except for TOYO and the three factories in Shenzhen which have implemented public and open employment channels, all of the other five factories do not hire employees openly, either using referral agencies or hiring based on the referrals of current employees. If the factory recruited workers directly, it would only take one day to go through the process, but by using employment agencies and other indirect methods to recruit workers, it often takes two or more days to complete the process. At the same time, the employment agencies charge workers 100-500 RMB (16-80USD) for their services, increasing the financial burden on jobseekers.

There was also substantial evidence of age discrimination in the hiring policies at nine of the ten factories (information was not available for the tenth factory, Riteng). The exact age restrictions on new hires in each factory are detailed in the chart below:

Age

United Win

Catcher

Foxconn

BYD

Ken-seisha

TOYO

AVY

Tenglong

Jabil

Min

16

16

16

16

16

16

16

16

16

Max

30

30

35

35

35

35

35

35

38

According to national labor laws, the retirement age for male and female workers is 60 and 55, respectively. The right to work is a basic human right, and by instituting such obvious discriminatory policies, these factories are effectively depriving older workers of their rights in a very serious and fundamental way. The use of younger workers on a temporary basis may also make it easier for the factory to impose any working conditions it chooses without facing objections.

1. Tenglong

Prospective workers are not directly recruited outside the Tenglong factory gates, but must instead be recommended for a vacant position through an intermediary referral agency. The fee is either 50 or 100 RMB ($8 or $16) depending on the agency. Some workers, however, are hired through on-campus recruitment events at schools. To be hired through a referral agency, workers must submit proof of identification before going to the factory for an interview under the guidance of an agency employee. Height requirements for male and female workers are 166 cm and 155 cm, respectively. Graduation from junior high school is the minimum education requirement, but it is possible to receive a fake diploma from the agency at additional cost. In a telling example of regional discrimination, we saw a sign that read “No people from Shandong wanted” hanging outside one of the agencies. Before starting work, workers need to complete a health examination. The fee for the exam, paid in full by the worker, is 60 RMB ($9.5). The factory provides a work uniform free of charge. If a worker wishes to leave, they just need to submit their letter of resignation one month in advance.

The labor contract that workers end up signing is with the referral agency, not with the factory. The term of the contract is two years without a trial period. If a worker wants to become a direct-hire employee in the factory, they typically must wait until the completion of the two-year contract. However, it is also possible for a dispatched worker with a good work record to become a direct-hire employee before the end of their contract.

2. AVY

There is no onsite recruitment at the factory. Instead, all prospective workers must be hired through local employment agencies. According to the data we gathered from workers, the agencies' fees vary between 300-500 RMB ($48-$80) with workers looking for employment during the peak season generally paying more. There are no discriminatory hiring practices with regard to region, ethnicity, religion, or gender. However, male workers must be at least 165 cm tall, and female workers at least 155 cm. The workers must submit proof of identification before they begin working.

To be hired, workers must first complete a health examination that costs 50 RMB ($8). After working at the factory for half a year, the factory will reimburse half of the examination fee. However, this reimbursement is not distributed until a worker formally ends their employment.

The worker signs a labor contract directly with the factory. According to the factory's recruitment poster there is a one-month trial period, but according to workers, that period is three months long. The factory does have a path for dispatched workers to transition to formal employment, but this transition has nothing to do with the completion of the initial trial period. Instead, dispatched workers will only have the opportunity to become direct-hire employees after completing six months on the job. Only about one-third[13] of the factory’s total workforce are direct-hire employees.

3. Jabil

Jabil uses four different methods to hire workers. The first is directly hiring workers through the factory. On recruitment days, factory management will put up a recruitment notice outside the factory’s main entrance in the morning. Around one o’clock in the afternoon they will begin recruiting by the factory gates. Prospective employees must bring proof of identification, their most recent diploma, other relevant documentation, and a pen. Workers that are hired go to Shajing Disease Prevention Health Clinic for a health examination that same afternoon. The fee for the exam is paid out of pocket by the worker. The second hiring method is to recruit workers by posting a notice outside the office of one of Jabil’s subcontracted factories. Even though this path to employment is not directly through Jabil, no referral fee is charged. The third way is for the worker to be recommended by a local referral agency for a fee of 210 RMB ($33). Many workers report that the Shajing Talent Referral Office requires an additional 500 RMB ($80) work fee. The fourth method is to be hired as a dispatch worker at the Anxin Labor Services Dispatch Company and then be dispatched to Jabil.

Shenzhen Talent Human Resources Co. Ltd. takes advantage of workers seeking employment at Jabil, swindling them of anywhere between 110 and 710 RMB ($17 and $113). They promise jobseekers that they will only need to pay after a successful interview, but the interviews that they arrange are all for show, conducted by one of their own employees instead of a hiring manager from the factory. During the so-called “interview” workers are asked for proof of identification and to describe their personal background, but the positive result is all but guaranteed. Workers are then expected to pay the agency fee (210 RMB/$33 for men, 110 RMB/$17 for women). After payment is received, they will be issued a “Letter of Recommendation,” but having not yet interviewed at the factory, employment is not guaranteed as advertised. The standard fee for Shenzhen City Zhichengtong Labor Services Dispatch Company is 300 RMB ($48) for a male worker, but female workers are recommended to the factory free of charge. Restrictions include no tattoos, no nail polish, and no unusual hairstyles. However, there are no restrictions on region, ethnicity or religion.

Underage workers that are recommended by recruitment agencies or labor dispatch companies can be accepted, but they need to pay a 210 RMB ($33) referral fee and a 500 RMB ($80) work fee. They fill the same positions and perform the same tasks as other workers.

As part of the hiring procedures, workers must submit four copies of their ID for factory records. The factory quickly checks the authenticity of the ID card, diploma, and health certificate before returning these documents to the worker. Workers who need to register for a social security card must leave their ID card with the company for one week. The factory does not hold on to any documents as leverage against workers or require a monetary deposit. While the factory does not charge any expenses, the recruitment agencies and labor dispatch companies that workers use to seek employment charge 210 RMB ($33) or more. When the factory is in urgent need of employees, the labor dispatch companies will not charge female workers a referral fee.

The factory provides workplace training for all new employees. The training period is typically two days but sometimes only one day, and covers background information on the factory, worker safety, and factory rules and regulations. The workers receive full pay for the duration of the training. The factory also provides work uniforms free of charge, and when workers leave the factory, they are not required to return the uniforms to the factory.

Workers fill out and sign a contract with the labor dispatch company their first day on the job. The term of the contract is one year with a one-month trial period and a three-month period before dispatched workers can become direct-hire employees. The contract also covers wages and benefits, basic social security programs, conditions for violation and termination of contract, and place of work. Workers are given a copy of the contract for their personal records. Some employees reported that new workers are not given a labor contract until they are directly hired by the factories after three months on the job.

After three months, dispatched workers with a good work record will be directly hired by the factory. However, some workers choose to turn down the offer and remain with their labor dispatch company. One reason an employee might decide to do this is because the factory deducts 400 RMB ($64) from direct-hire employees’ monthly paychecks for social insurance and other programs, but only deduct 200 RMB ($32) from dispatched workers. Labor dispatch companies deduct an additional 100 RMB ($16) per month for a service fee.

4. BYD

BYD recruits workers primarily through two different channels. The first channel is arranging interviews between prospective workers and staff members from the human resources department near the factory’s rear gate. The second is hiring workers that are recommended by local recruitment agencies. Employees who are seeking employment at BYD for the first time typically choose the first option. Male workers who have previously worked at BYD and who want to work in the factory again must use the second option, paying approximately 700 RMB ($112) for an agency referral. Sources suggest that a majority of this fee is used to “pull strings” with the factory’s human resources manager. Female workers who have previously worked in the BYD factory must wait at least three months before reapplying for a job there. Employees that decided to leave the factory on their own accord are not allowed to work at BYD a second time. However, if they pay for a referral from a referral agency and use another person’s ID to fill out paperwork at the factory, they can be rehired. After working six months in the factory they can pay a 400 RMB ($64) processing fee to switch to their own ID. During the hiring process, new employees must provide a copy of their ID for the factory to keep on file, but they do not need to provide any additional documentation or deposit. The factory requires that all new hires undergo a physical exam (30 RMB/$5), set up a bank card to receive wages (10 RMB/$1.6), and register for a residence permit (10 RMB/$1.6). Altogether the costs for a new worker are 50 RMB ($8).

Each employee is given two uniforms free of charge when they begin working at the factory. If a worker loses a uniform or needs a new one for some other reason, they can pay 45 RMB ($7) per additional uniform. When an employee leaves the factory, they must return their uniforms or else the factory will deduct 45 RMB ($7) per uniform from their outstanding wages.

5. Kenseisha

Kenseisha does not directly recruit workers at its factory gates, instead going through employment agencies to find their machine operators and occasionally recruiting assistant technicians at surrounding vocational schools, The work of technicians and operators are essentially the same, but technicians receive an additional 20 RMB ($3.2) bonus each month. Workers recruited through employment agencies are exempt from paying placement fees.

The factory does not discriminate against potential hires with regard to race, religion, gender, or home region. Operators must have graduated from junior high school, while assistant technicians must have a diploma from a secondary vocational school. All workers must demonstrate elementary proficiency in English. Height requirement for male and female workers are 160 cm and 150 cm, respectively, and eyesight must be 20/25 or better. Workers are required to undergo a physical exam before starting work in the factory; the 60 RMB (≈$10) fee is paid for out of their own pocket. The factory provides workers with free uniforms. During the trial period employees can leave on the same day that they tender their resignation, but after the trial period they must give one month’s notice before leaving. The standard contract that workers sign with the factory lasts for two years and includes a two-month trial period. Workers who have been dispatched to the factory sign a contract with their labor dispatching company. Workers sign two identical copies of the contract and retain one copy for their personal records.

6. Catcher

While a vast majority of workers at Catcher are actually employees of independent labor dispatch companies, a small portion were hired directly by the factory after being introduced and recommended by a current worker or local referral agency. When Catcher or its partnered labor dispatch companies conduct recruiting, they do not discriminate against applicants on the basis of their gender, home region, political beliefs, or other factors, but there are certain age requirements which are not publically disclosed. Besides the fees that workers pay to their dispatch companies, workers are not required to pay any other fees or deposits to the factory. Work uniforms are provided for free. Worker training is paid according to the standard wage. For more specific details, please refer to the section on hiring practices in China Labor Watch’s “Labor Situation Survey Report of the Catcher Science and Technology (Suzhou) Co., Ltd.”

7. TOYO

In addition to using referral agencies, the factory also recruits workers outside the factory gates at 1:30 pm every weekday. Applicants must be recommended by a current worker to be directly hired by the factory, and recommenders serve as guarantors for all new hires that they recommend. In other words, if there are any problems with the new employee, the recommender will assume full responsibility. A worker can be a guarantor for only one new worker per day, and up to a maximum of five workers total. Workers who enter the factory workforce with an internal guarantor do not need to pay a referral fee, but they must provide the name of the individual who introduced them and indicate clearly in writing the individual’s position and relationship to them. This information is then verified, and if there are discrepancies, the applicant will not be hired. Individuals who enter the factory through employment agencies are required to pay a fee of 150 RMB (≈$24) to 200 RMB (≈$32) depending on the agency. Those who go through employment agencies do not need to indicate a guarantor. According to investigators who observed onsite interviews, they found that one applicant born in 1977 was denied employment. The minimum education requirement is completion of junior high school, and there were no restrictions with regard to gender or regional background.

Workers at the factory must undergo a physical exam for 110 RMB (≈$17). Those who work more than ten days can be reimbursed for the exam fee after providing necessary receipts. The factory provides free work uniforms.

After passing the physical exam, workers sign a labor contract with the factory. All contracts are signed directly with the factory regardless of whether the worker was brought in through a referral agency or an in-factory guarantor. Contracts are for one year and include a two-month trial period. Although most contracts are signed on a yearly basis, there are a few open-ended contracts as well. This is partly because the workers have limited awareness of their rights and also because TOYO does not provide any information to workers on this subject.

8. Riteng

There are two main methods to seek employment at Riteng: be recommended by someone already working at the factory, or be recommended by a labor services company. If a new worker completes a full month of work, the factory gives that worker’s in-factory recommender a 300 RMB ($48) recruitment bonus, and once the new hire completes three months of work, the factory gives an additional 300 RMB ($48) bonus. Workers who come to the factory through a labor services company are required to pay an intermediary fee. After a worker has been on the job for about a week, the factory will provide them with two work uniforms. Workers who stay on the job for at least a year before leaving do not have the cost of the uniform deducted from their wages. If a worker works at the factory for less than a year, however, they must pay a fee of 50 RMB (≈$8) for the two uniforms.

After either one or two days of training in the factory, workers sign a labor contract. Contracts for workers recruited through the internal referral system and those who go through labor service companies are effective for three years with a trial period of six months, and the content of the contract is identical for both groups.

B. Hours and Remuneration

Interviews with workers from Kenseisha, Catcher, AVY, Tenglong, and TOYO revealed that these five factories all operate on a day-and-evening dual shift system and pay only the local minimum wage. In all the factories except Kenseisha, workers are paid a base salary of 1,140 RMB (≈$181) per month, or 6.55 RMB ($1.08) per hour. Overtime pay is 9.8 RMB ($1.6) per hour on work days, 13.1 RMB ($2.1) per hour on days off, and 19.65 RMB ($3.12) per hour on national holidays.

Jabil

Foxconn

BYD

Riteng

WORKING HOURS

Sample size

64

66

69

94

Fewest hours worked in a day

8

8

8

8

Most hours worked in a day

20

12

12

18

Average # of hours in a day

10

9.98

10.47

11.78

DAYS OF WORK

Sample size

60

65

67

89

Fewest days worked in a month

20

18

22

22

Most days worked in a month

30

28

30

31

Average # of days worked in a month

24.6

23.87

27.87

29.35

Average hours of work in a month

246

238.22

291.8

345.74

How satisfied are you with your work hours (%)

Very satisfied

7.9

3.1

/

4

Fairly satisfied

17.5

6.3

12.3

2.7

Indifferent

61.9

60.9

49.2

30.7

Fairly unsatisfied

9.5

15.6

29.2

13.3

Very unsatisfied

3.2

14.1

9.2

49.3

SALARY

Sample size

61

64

67

91

Lowest salary (RMB)

1900

1500

1800

1300

Highest salary (RMB)

4200

4150

4000

3600

Average salary (RMB)

2493.44

2501.41

2572.39

2833.63

How satisfied are you with your salary (%)

Very satisfied

4.8

0

3.1

1.3

Fairly satisfied

4.8

4.5

9.2

1.3

Indifferent

50.8

43.3

49.2

24.4

Fairly unsatisfied

22.2

31.3

26.2

17.9

Very unsatisfied

17.5

20.9

12.3

55.1

Average hourly wage

10.14

10.5

8.82

8.2

The above table covers the four factories for which there is the most information. Note that workers in Riteng are employed 29 days per month, working 347 hours, Only seven percent of the Riteng workers are satisfied with their work hours and only three are satisfied with their salary.

More broadly, workers at the six factories in Shanghai and Jiangsu province work an average of 300 hours per month, or more than ten hours a day, and earn around 3,000 RMB. While work hours tend to be shorter in the Shenzhen factories, the salary is also considerably lower.

In order to make up for the lower salary, workers in Shenzhen must work extensive overtime that can cause irreversible damage to their health and increase the risk of accidents on the job. This situation not only reflects the factories’ general disregard for workers’ health and safety, it is also a clear violation of national labor laws that prohibit overtime in excess of 36 hours per month.

1. Catcher

At Catcher, the day shift runs from 9 a.m. to 9 p.m., and the night shift from 9 p.m. to 9 a.m. Workers are given 90 minutes for two meals during their shifts, bringing the daily workload to 10.5 hours. The peak production season is from April to December, and the off-season is from January through March. During the peak season, workers get at most two days a month and may not have a single day off for an entire month. During the off-season, workers have at least one day off per week and work about 25 days in a month. The average monthly salary at the Catcher factory is approximately 2,900 RMB (≈$460).

2. AVY

The two shifts at AVY are from 8 to 8 with a half-hour break for each meal and total daily work time of 11 hours. During the off-season, workers have one day off per month, and they have one day off every two months during the peak production season. If a worker does not take a day off for an entire month, their overtime will reach 154 hours, and if they only take off one day a month, it will total 143 hours. According to workers at the factory, there is no rest given when a worker switches from the day shift to the night shift, but those going from the night shift to the day shift have one day off to adjust. The average monthly pay for a worker is around 3,000 RMB (≈$476), and direct-hire employees receive a bonus of 150-270 RMB (≈$24-43) each month.

3. Tenglong

At the Tenglong factory, the two shifts go from 8 to 8 for a total of 12 work hours a day. However, workers must arrive 15 minutes before their shift for a group meeting, and the meeting time does not count towards work time. The factory maintains a regular flow of orders from long-time clients so overtime hours are fairly predictable, generally totaling 170 hours per month. During the off-season, workers have one day off per month, which during the peak season they do not have a single day off for entire months at a time. Workers’ monthly pay is around 3,000 RMB (≈$476). The wages of workers who have not been directly hired by the factory are transferred to a bankcard by their employment agency, and pay slips are issued to all workers by the factory’s human resource department.

4. TOYO

At TOYO, day and night shifts last from 7:30 to 7:30 each workday. Two meal times are scheduled for 90 minutes each, but workers have indicated that the factory often schedules employees to keep working during the afternoon, reducing mealtime to just half an hour. After working a full shift, a worker can choose to work an extra 90 minutes of overtime. In other words, day shift workers may work until 9 p.m. and night shift workers may work until 9 a.m. Of course, workers are also free to decline the extra overtime. Workers can only take off one day per month. If a worker chooses to perform overtime, their monthly overtime may well exceed 200 hours. The average monthly pay at the factory is approximately 3,000-3,500 RMB (≈$476-555).

5. Kenseisha

Kenseisha’s day and night shifts include 11 hours of work time, running from 8:30 to 8:30 with two half-hour breaks for meals. During the off-season workers can get one day off per week. During peak production, however, they only get one day off every two months. Workers typically log 85 to 150 hours of overtime each month. Base pay is 1,300 RMB (≈$206) per month, or 7.47 RMB ($1.19) per hour. The hourly rate increases to 11.2 RMB ($1.78) for regular overtime, 14.94 RMB ($2.37) on a designated off-day, and 22.4 RMB ($3.55) on a national holiday. Workers’ total monthly pay ranges from approximately 2,800-3,500 RMB (≈$444-555).

6. Foxconn

Foxconn has many different departments and work zones, and each one has a different system for work shifts. Some departments have two shifts a day, while others operate on a one- or three-shift system. Those working under a two-shift system have a meal break in the middle of their shift and work between 10 and 11 hours a day. Those who work one shift typically work eight hours a day, but during peak production, they must work one to three hours of overtime in the evening. Employees who work under a three-shift system work six to eight hours daily. In some departments workers only work 18 days a month, while in others they work anywhere from 21 to 28 days.

The wages of Foxconn workers are kept largely confidential, since workers’ pay varies within departments and even along a single production line. The base salary for a typical worker ranges from 1,350 RMB (≈$214) to 2,800 RMB (≈$444) per month, and the wages of new hires are not necessarily all the same either; the lowest starting wage is 1,350 RMB (≈$214) per month but some receive 1,500 RMB (≈$238) a month. Workers themselves are not clear on how pay is determined, and those interviewed said that wages are decided by upper-level managers. Since most workers are paid hourly, they rely heavily on overtime to make ends meet. Some workers receive monthly bonuses as well.

Since different departments produce different products for different brands, workers’ pay often varies between departments. Interviews have revealed that workers who make Apple electronics make slightly more money than those who work on other brands’ products, though this is undoubtedly correlated with the amount of overtime worked. In our investigation, we found that in some cases wages were different even when the type and quantity of work was the same. For example, we interviewed two workers from different cell phone departments who were working the same hours; the worker producing cell phones for a small brand-name company was earning only 2,500 RMB (≈$397) per month, while the Apple worker earned 3,200 RMB (≈$508).

7. BYD

Departments at BYD run on either one-, two-, or three-shift systems, but most workers only work one shift a day. For example, workers in Department No. 3 work from 8:00 am to 11:30 am, and then 12:30 pm to 5:30 pm. Overtime begins at 6:30 pm and lasts for 90 to 180 minutes. Recently, though, workers rarely work overtime. Every department has its own system, but workers generally work between 22 and 30 days each month.

Pay for most workers is set at the local minimum wage of 1,320 RMB (≈$209) per month. Overtime pay is calculated according to relevant regulations in the “Labor Law of the People’s Republic of China.” Some positions are paid according to a piecework wage system, but because the unit prices of factory products are not disclosed, workers cannot fully understand the methods used to calculate their pay. As long as their pay matches up roughly with the number of items they produced that month, the workers are satisfied.

8. Jabil

In 2011 the peak production period at Jabil was from March through May. During this stretch, workers had two hours of overtime each regular work day, ten hours of overtime on off-days, and one day of rest per week. Altogether, workers averaged 84 overtime hours per month. Except for the plastics department and administrative office which operate on a one-shift system, all other departments in the factory run on a two-shift system. The day and night shifts go from 8 to 8 each day, and workers are given 24 hours to rest and adjust before switching shifts at the end of each month. Workers have between four and eight days off each month, and the longest stretch that a worker will have to work is six consecutive days. During each shift workers have one hour for lunch and one hour for dinner. Workers have at least 10 hours to rest each day.

The average monthly salary is between 2,500 RMB (≈$397) and 4,000 RMB (≈$635). However, workers who log little overtime only earn between 2,100 RMB to 2,500 RMB (≈$333-397). Wages are calculated by adding base salary, overtime pay, and bonuses and then deducting social insurance, 60 RMB ($9.5) for rent, 5 RMB ($0.8) for utilities, and any fines. Altogether, the factory deducts over 400 RMB ($63) from the wages of direct-hire employees, and the labor dispatch company deducts more than 200 RMB ($32) from their dispatched workers. Workers’ referral agencies pay the first three months of a worker’s salary and deduct a service fee of over 100 RMB ($16) each month. Workers in groups that manufacture finished products earn an average monthly salary between 2,500 RMB and 3,000 RMB (≈$397-476), while workers in processing groups make between 3,000 and 3,500 RMB (≈$475-555).

9. Riteng

Workers at Riteng typically work six days a week, 11 hours a day, and 26 days a month. During peak production, workers generally work seven days a week and may not have a day off for months at a time. Day and nights shifts run from 8 to 8 and include two half-hour breaks for meals. Workers switch shifts at the end of each month.

The base salary for a direct-hire employee is 1,280 RMB (≈$203), but including overtime pay, average monthly wages are around 2,800 RMB (≈$44). The factory deducts 180 RMB (≈$29) for board, which includes three meals a day, 30 RMB for laundry, and 80 RMB for utilities. Workers who do not live in the factory dorms or eat in the factory dorms are not charged for these expenses, but the laundry fee is deducted regardless of whether or not the worker washes their clothes.

C. Working Environment and Occupational Safety

During our investigation, we found that the working conditions in factories that produce metal cases for Apple products are especially poor; workers are often exposed to loud noise, toxic airborne particles, and hazardous chemicals on a daily basis, and injuries while operating machinery are not uncommon.

Jabil

BYD

Foxconn

Riteng

What do you think of the protective equipment provided by the factory (%)

Qualified and adequate

39.1

23.2

32.8

25

Provided, but inadequate

43.8

68.1

45.3

68.5

Provided, but does not meet standards

7.8

7.2

18.8

1.1

Don’t provide

6.3

1.4

3.1

5.4

What do you think of the occupational training (%)

Thorough

4.7

7.6

/

1.1

Fairly Thorough

18.8

15.2

15.2

9.7

Acceptable

46.9

63.6

54.5

24.7

Poor

3.1

9.1

19.7

17.2

No training

14.1

/

4.5

47.3

Unknown

10.9

4.5

6.1

/

How much does the working environment affect your health (%)

Large influence

7.8

16.4

/

50.6

Fairly large influence

20.3

37.3

18.2

36

Small influence

39.1

28.4

37.9

6.7

No influence

15.6

3

12.1

2.2

Unknown

17.2

14.9

31.8

4.5

How would you rate your factory’s performance on work safety and health (%)

Very good

9.4

7.6

7.8

/

Good

28.1

18.2

23.4

14.3

Acceptable

40.6

57.6

51.6

33

Bad

4.7

10.6

1.6

49.5

No opinion

17.2

6.1

15.6

3.3

This table flags how the majority of workers at BYD and Riteng feel their working environment has a fairly large influence on their health and these two factories do not provide adequate protective equipment to the workers.

What is more, verbally abusive managers and unreasonable factory rules are problems at virtually all of the supplier factories. The workers at Riteng have to work standing on their feet for hours on end, and they need to get permission to go to the restroom. Only one worker on each production line is permitted to go the bathroom at a time. There is no time limitation for workers to use the restroom, but if they leave for a long time, the line leader will scold them. At Catcher, the onsite line manager occasionally scolds, and even verbally abuses, workers if they talk loudly during work. Workers reported that they have grown used to it. Workers in the Die Cutting Machine department at Jabil must attend a 15-minute meeting before each shift that is not counted towards their working time. They have exactly 30 minutes to take their meals, and workers feel that they cannot take water and restroom breaks freely. Although they do not need permission to use restroom, they need the line manager or foreman to replace them during a bathroom break.

Jabil

BYD

Foxconn

Riteng

Does the onsite manager verbally abuse workers （%）

Yes, and unsatisfied with it

7.9

30.3

14.5

42.2

Yes, and indifferent

31.7

22.7

24.6

14.5

Yes, and understandable

17.5

7.6

24.6

16.9

Rarely

36.5

24.2

18.8

19.3

Never happened

3.2

7.6

10.1

3.6

Unknown

3.2

7.6

7.2

3.6

Factory regulations（%）

Unreasonable

19.6

47.5

58.5

58.5

Reasonable

98.2

52.5

41.5

41.5

The onsite manager and factory regulation about other factories which we conduct survey is analyzed as follows.

1. Catcher

Catcher primarily manufactures metal cases which require use of heavy machinery and increase risks to workers’ health and safety.

Metal particles on workers’ faces after they remove their masks at the end of their shift

The Sanda process in particular generates a lot of loud, piercing noise. Although the factory provides earplugs and other protective equipment to workers, working in such an environment for an extended period of time will inevitably cause damage to workers’ hearing. Industrial processes like Sanda, polishing, and sand blasting also produce large quantities of metal dust. These airborne particles accumulate quickly in closed, air-conditioned workshops with poor ventilation. Meanwhile, the simple face masks that the factory provides do not effectively prevent workers from inhaling metal dust; as shown in the photos above, a thick layer of metal dust was evident under workers’ nostrils when they removed their masks at the end of their shifts.

Catcher does not provide safety training to new workers nor do they inform workers of the inherent risks of their occupations. There are fire extinguishers, emergency flashlights, and other common fire-fighting equipment in the workplace, and fire escape routes are kept clear at all times. However, there is no training on how to use the equipment and no fire drills to describe escape procedures.

2. Tenglong

The workers at Tenglong have to work standing on their feet all day, and the dust inside the factory is dense. According to one interviewed worker, air quality in the factory is “so poor that working inside is like being a street sweeper on a dusty road.” Working in the factory is far more dangerous though because the metal dust that workers breathe into their lungs is significantly more toxic that the soil-based dust that accumulates on sidewalks and streets.

3. Riteng

Workers at Riteng told us that the factory provides gloves, masks, earplugs and other protective equipment to workers, but that they are of poor quality and will only be replaced when they are completely worn out. The factory only switches to better equipment in preparation for a customer visit or factory audit.

4. Kenseisha

Kenseisha provides masks, gloves and other protective equipment to workers but use of equipment is not closely monitored; some workers wear it and others do not. The factory produces aluminum products, and there is scrap metal strewn around the factory premises. According to workers, work-related injuries occur occasionally.

5. TOYO

According to workers in the surface treatment department at TOYO, the smell of chemicals in their workplace is overwhelming. The factory provides gloves, uniforms, and caps to workers. We noticed that surface treatment workers’ uniforms were speckled with oil. When a worker’s contract is renewed each year, they must undergo a physical examination.

6. AVY

According to workers at AVY, the air quality in the factory is poor and workers are often exposed to toxic chemicals. During the investigation, we spoke to a worker with a severely injured hand who had only been working in the factory for three months. While he was working one day a strong corrosive chemical leaked into his glove and badly burned his hand. When we spoke to him, his hand was covered with a bandage, and he told us he was still on injury leave. The factory had not signed him up for the government’s social insurance program, buying private insurance on his behalf instead, but they compensated him for all related medical expenses. The worker’s unhurt hand was also calloused, rough, and shedding skin. He told us that he plans to leave the factory soon because he is afraid of the health effects of the toxic air in the factory.

7. Foxconn

According to workers at Foxconn, occupational hazards, such as low-level radiation, chemicals, and dust, do exist in some areas of the factory. Although the factory provides safety training to workers, it is not very informative and is carried out only perfunctorily. The factory provides protective equipment to workers, but some workers reported that the protective equipment was inadequate and not up to standards. Workers have little faith in the equipment’s effectiveness.

8. BYD

Some workers at BYD are regularly exposed to chemicals, radiation, and other occupational hazards. According to some workers, their work area is deafening and extremely hot. However, the factory does not release measurements of workplace radiation and other hazards, so workers have little idea of how harmful such conditions are on their health.

The factory provides safety training and protective equipment to some workers. However, a lot of workers reported that the training was too short and uninformative to be effective and that the protective equipment is inadequate and may not even meet factory standards. There are some work-related injuries in the factory. For example, the workers in the laser welding workshop told us that there were at least four work-related injuries in their workshop recently—in most cases, a worker’s hand had been cut or crushed by machinery.

D. Meals and Housing

According to worker interviews and onsite observations, all the factories provide free meals to workers at shift, but with lack of tasting in food and limited choices. Also, living conditions in the factories are not satisfying either. Only Catcher and TOYO provide dormitories to workers, and AVY does not accommodate dispatched workers, who occupy two-thirds of their workers. Kenseisha and Tenlong do not offer dorms at all. Workers find the dorms crowded, unsanitary and poorly facilitated.

Below is the information on the dorm conditions at the four factories that we collected from our surveys. Note how common it is for the dorms to be crowded, lacking in facilities, and dirty:

Jabil

BYD

Foxconn

Riteng

How are conditions in your dorm (%)

Very good

4.8

1.4

6.1

/

Good

22.2

10.1

9.1

2.2

Average

38.1

50.7

47

20.7

Bad

6.3

17.4

15.2

17.4

Very bad

3.2

11.6

6.1

58.7

Not clear

25.4

8.7

16.7

1.1

What problems exist in your dorm? (%)

Crowded

35.1

41.2

73.3

69.2

Lacks facilities

24.6

45.6

16.7

49.5

Lack of ventilation and light

3.5

29.4

13.3

26.4

Dirty

35.1

41.2

30

68.1

Unsafe

7

11.8

10

24.2

Expensive

3.5

7.4

11.7

30.8

Tension with roommates

5.3

5.9

13.3

13.2

Bad roommate arrangement

8.8

22.1

15

8.8

Insufficient water

24.6

7.4

13.3

18.7

Below is the data of workers opinions on factory meals. Huge proportions of the workers found the food to be unsanitary:

Jabil

BYD

Foxconn

Riteng

How is the quality of food in the cafeteria (%)

Very good

7.8

1.5

6.1

/

Good

18.8

5.9

9.1

/

Average

54.7

63.2

47.0

9.6

Bad

15.6

16.2

15.2

19.1

Very bad

/

10.3

6.1

69.1

Not clear

3.2

2.9

16.7

2.1

What problems are there with the food (%)

Expensive

4.9

18.2

43.1

45.7

Unsanitary

49.2

40.9

38.5

67.4

Portions too small

21.3

33.3

29.2

67.4

Lack of variety

36.1

45.5

23.1

66.3

Not nutritious

9.8

37.9

30.8

64.1

Too plain

44.3

39.4

29.2

50.0

Other

4.9

3.0

/

1.1

1. Catcher

The cafeteria at Catcher offers three meals a day; breakfast for two RMB ($0.3), and lunch and dinner for six RMB each ($1). For lunch and dinner, the cafeteria offers a choice between rice-based and grain-based meals. Rice-based meals come with unlimited rice, soup, three of four different vegetable sides, and one of three different sides with meat. Grain-based meals consist of two of four different types of skewered meats and vegetables cooked in spicy soup, served over rice noodles in clear broth and with a side of two steamed buns. Hot sauce is provided to workers who like spicy cuisine.

The cafeteria has air conditioning and a television. The tables and floor are cleaned in a timely manner, and cafeteria workers wear all appropriate sanitary equipment. According to workers, although the cleanliness of the cafeteria is good overall, the taste of the food is lacking, and workers with different dietary preferences are unsatisfied with the limited number of choices.

The factory provides the meals described above for free on any day that a worker has a shift, whether it be a regular work day, designated day off, or national holiday. Workers can simply swipe their IC card for the meal or any other goods of equivalent value, like prepackaged drinks or snacks. On days that workers do not work, they must pay for their own meals. They can either pay with cash or use their IC card to deduct the purchase directly from their paycheck.

Catcher provides dormitories to workers at affordable prices. Workers are free to choose whether they live in the dormitories and also whether they want to live in a six-person or eight-person room. There are no preferential policies for workers with higher positions or seniority. The price for a bed is 100 RM ($16) per month in a six-person room and 80 RMB ($13) per month in an eight-person room. The factory deducts the fee directly from workers’ salaries, and there are no additional expenses for utilities or management.

Each dorm room has a bathroom, balcony for hanging laundry, and shower room with hot water. Rooms are also equipped with an air conditioner, personal lockers, and cleaning supplies. Because no specific person is responsible for cleaning the dorm rooms, they tend to be fairly messy. Janitorial staff cleans the hallways and other public areas on a regular basis though.

Each dorm building has a TV room, library, and ping pong table that are free and available to use 24 hours a day. Workers can also buy things at the supermarket or use the internet café at their own expense. Because workers have limited time off work and enjoy different forms of entertainment, few of them take advantage of these facilities.

The workers who live in a dorm can enter and leave their dorms as they wish with no time restrictions whatsoever. Catcher provides free shuttle service to workers who live outside the factory. Workers who do not live in the dormitory do not need to pay the dormitory fee, but the factory does not provide them with any accommodation allowance either. Workers can choose the most convenient shuttle bus depending on their location. However, if the workers do not choose to work overtime after their regular shift ends at 7:30 pm, they must arrange for their own transportation home or wait until the shuttles leaves the factory at 9 pm. This, naturally, strongly encourages them to undertake the overtime work.

2. TOYO

The factory provides free meals, consisting of three side dishes and soup, to all workers on their workdays. According to workers, the taste is average, but because it is free and because there are no restaurants near the factory, they have no choice but to take their meals in the factory.

Worker dorms are not located on the factory premises but instead in Fuhuan Park about ten miles from the factory. The workers who live in the dormitory can take the free shuttle bus to and from work, but if workers want to return to the dorms earlier or later than the scheduled time, they have to take public transportation. The factory charges workers 60 RMB ($9.5) per month for rent, including utilities.

3. Kenseisha

The factory provides free meals to workers on their workdays. If a worker is not working on a certain day, they can still eat in the cafeteria for 1 RMB ($0.16) per meal. According to workers, the food in the cafeteria is so bad that many workers go to a small shop on the factory premises to buy instant ramen noodles or leave the factory to buy bread in the Export Processing Zone instead. Because workers only have 30 minutes for each meal, they have to eat quickly with little or no downtime. At best the workers can have a quick smoke break before rushing back to work.

The factory does not provide dorms for workers. Most workers live with their coworkers in housing near the factory. The dormitory next to CITI INVEST has the highest concentration of Kenseisha workers, and workers typically ride bikes and scooters to and from work. The factory provides no accommodation allowance.

4. AVY

The factory provides free meals and living accommodations for direct-hire employees, but only free meals for the dispatched workers that make up some two-thirds of the factory workforce. Consequently, all dispatched workers rent out rooms in the communities around the factory. The factory does not provide them with any accommodation allowance.

Mealtime lasts only 30 minutes. According to workers, the time is too short, and there are too many workers getting food at the same time. They have to rush to work after every meal and never have a minute to rest.

5. Tenglong

The factory provides free meals but no dormitory. Most workers choose to live in dorms arranged through a referral agency, but some also rent apartments outside the factory. The dormitory arranged through the referral agency costs 120 RMB ($19) per month for a bed in an eight-person room. Because workers from different factories live in the same room, workers may be concerned about their possessions, and there may also be scheduling conflicts that disturb workers’ sleep patterns.

E. Labor Unions and Leisure Life

As the questionnaires conducted in the following four factories, Jabil, BYD, Foxconn and Riteng show, more than half of their workers are not sure if there is a labor union in their factories, let alone their awareness of labor union activities. Workers from all the four factories revealed that they never or seldom submit recommendations to labor unions as few or no changes had been made. Their leisure life aspects were also been reflected in the table below.

Jabil

BYD

Foxconn

Riteng

Is there a labor union? (%)

Yes

28.6

30.4

43.9

5.5

No

15.9

26.1

4.5

65.9

Not sure

55.6

43.5

51.5

28.6

Are there labor union activities? (%)

Know of labor union activities

4

19.4

23.4

4

Do not know of labor union activities

96

80.6

76.6

96

Do you submit recommenddations to the labor union? (%)

Never

56.4

62.7

68.2

69.8

Occasionally

41.9

28.4

30.3

18.9

Often

1.6

9

1.5

11.3

Jabil

BYD

Foxconn

Riteng

What do you do after work before you go to sleep? (%)

Bored with nothing to do

31.7

26.1

36.4

50

Shop

27

34.8

31.8

83.7

Watch TV/read/listen to the radio

27

21.7

12.1

44.6

Browse the internet

42.9

42

39.4

31.5

Spend time with family

1.6

2.9

1.5

6.5

Work a part-time job

6.3

8.7

9.1

21.7

Sports

6.3

20.3

10.6

5.4

Socialize

9.5

10.1

7.6

9.8

Study

3.2

5.8

13.6

8.7

Other

1.6

2.9

3

1.1

What response did you receive from the labor union after submitting a recommendation? (%)

Received no response

13.8

7.9

30.6

17.8

Received response, but saw no change

29.3

41.3

43.5

53.3

Received response, and noticed some change

50

41.3

17.7

20

Received response, and noticed complete and timely change

6.9

9.5

8.1

8.9

F. Riteng vs. Foxconn

As noted, in the wake of a series of suicides by its workers, as well as several reports documenting the harshness of its working conditions, Apple’s largest supplier in China (Foxconn) has been the subject of much criticism this year. Apple has verbally committed to ensuring reforms in some of Foxconn’s worst practices.

The criticism of Foxconn is appropriate, and improvements there would be of benefit to a large number of workers. But what stands out from the comparisons in this chapter of Foxconn’s workers producing Apple products to other Apple suppliers in China is how Foxconn is no aberration. Working conditions have severe shortcomings throughout Apple’s supply chain, and Apple needs to ensure that reforms are made by all its suppliers, and not just Foxconn.

Indeed, as the Table below shows, working conditions at Foxconn’s Apple factory in Shenzhen, as bad as they are, are nonetheless better than working conditions found in Apple supplier Riteng’s three factories in Shanghai. The table includes selected, important indicators from other tables in this document.

Riteng - Shanghai (3 factories)

Foxconn - Shenzhen

Surveys distributed

100

70

Surveys returned

94

66

Approximate number of workers

20,000

120,000

Percent of workers that are dispatched

50%

8%

Average number of hours worked per day

11.8

10

Average number of days worked per month

29.4

23.9

Average hours worked in month

346

238

Lowest salary (RMB)

1300

1500

Highest salary (RMB)

3600

4150

Average salary (RMB)

2834

2501

Average hourly wage (RMB)

8.2

10.5

Average hourly wage in U.S. dollars

$1.28

$1.65

Percent rating factory's safety and health as 'bad'

50.0%

2.0%

Percent rating dorm conditions as 'bad' or 'very bad'

76%

21%

Percent rating dorm conditions as crowded

69%

73%

Percent rating dorm conditions as lacking facilities

50%

17%

Percent rating dorm conditions as dirty

68%

30%

Percent indicating food is unsanitary

67%

39%

The Riteng factories employ 20,000 workers. On average these workers are on the job nearly 12 hours a day compared to 10 hours a day at the Foxconn factory. The Riteng workers get only about one day of rest each month. Their overtime hours dwarf those of the Foxconn workers, which themselves are well above the legal limit set in China.

While Riteng workers have average monthly salaries greater than Foxconn workers, this reflects the greater number of hours worked, not higher salary levels. For Riteng workers, the average hourly wage is 8.2 RMB or $1.28 USD, well below the still-meager average hourly wage of Foxconn workers of 10.2 RMB or $1.65 USD.

The safety and health of the factory in Riteng is particularly troubling. Half of the workers there rated its safety and health as ‘bad’ compared to just 2% of workers giving this rating to the Foxconn factory.

Living conditions are much worse at the Riteng dorms than at the Foxconn dorms. Around 70 percent of workers in both locations said the dorms were overcrowded. But more than three times as many Riteng workers (76 percent) rated the dorm conditions as ‘bad’ or ‘very bad’ compared to the ratings by the Foxconn workers (21 percent). For instance, half of the Riteng workers said the dorms were lacking facilities while 17 percent of Foxconn workers made such an assessment. Also, 67 percent of Riteng workers said their food is unsanitary, much higher than the still-unacceptable portion of Foxconn workers saying their food is unsanitary (39%).

[8] Actually, the dispatched workers constitutes 70% of the workforce in Shenzhen, and 90% of the workforce in Suzhou, except for managers and technicians. They are estimated percentages based on this investigation.

[10] We investigated 10 Apple supplier factories, which are listed in the Apple Supplier List 2011, and there exists the problem of labor dispatching practice in every factory. However, this part of the investigative report focused on the eight of them.